CME Group (NASDAQ:CME) reported its Q3 results, with EPS of $1.98 coming in better than the Street estimate of $1.92. Revenue was $1.2 billion, slightly below the Street estimate of $1.22 billion.
Analysts at Deutsche Bank provided their views on the results, reiterating their buy rating and tweaking their price target to $202 from $200 on the company’s shares.
While the analysts viewed Q3 results as being good overall with better spread income and cost control driving the 3% earnings beat, they noted that trends into Q4 appear mixed. Positively, the company is generating stronger net interest income on its client cash collateral balances, which should sustain into Q4. On the other hand, management maintained its 2022 expense outlook, implying a 15% sequential expense lift in Q4, mostly on higher comp and marketing/event/travel spend.
The analysts continue to see the company's current discounted valuation as a good entry point for a relatively stable EPS story in tough markets with a nearly 5% dividend yield.